Investors seize the advantage

Six months after their launch, best-practice guidelines devised by the investors’ trade body have become a reference point for the industry

By

Tom Fairless

April 23, 2010 5:24 pm GMT

Private equity fees have long been a bugbear for many investors. During the boom years of 2005 to 2007, top firms could, in effect, name their price, supplementing hefty management and performance fees with lucrative transaction fees – paid by a portfolio company to its private equity owner when a deal is carried out. Investors sometimes complained but mostly played along, desperate to enter oversubscribed funds. Increasingly, however, investors are gaining the upper hand.